INVESTORS have started taking positions in the stock market in anticipation of the planned sale of the ten banks that were bailed out by the Central Bank of Nigeria (CBN) with N620 billion last year.

The decision for the early positioning by investors is informed by the opportunities that could emerge from the outright sales of the banks and as an avenue to leverage their cost in other portfolios.

The additional benefit that might likely arise from the sales and the Asset Management Company of Nigeria (AMCON) which will soon debut in the market, are capital appreciation and good returns on investment by way of dividends.

As a market that thrives on the tripod of information, strong fundamental of listed companies and hearsay, the confidence booster of investors arising from the sale of the rescued banks by the apex bank, apart from impacting positively on banks shares, will equally rub on other equities in the market.

It will be recalled that throughout the five days of trading on the Nigerian Stock Exchange (NSE) the previous week, value of equities were in the red as market performance indicators depreciated by 2.93 per cent thereby affecting both small and institutional investors.

But, with the cheering news that filtered through the securities market last Monday that the apex bank had received some green light from the would- be buyers of the troubled banks, investors started giving mandate for the purchase of shares.

This singular action coming from the investors, who had hitherto watched the market trend from a distance, upturned the bearish hold on the market and thereby gave new lease of life to stocks which analyst said in terms of pricing had reached their lowest level or bottom out, as they started appreciating.

It will be recalled that CBN governor, Muham Lamido Sanusi, had said that the apex bank had received bids for four of the nine  rescued banks last year, stressing that two foreign institutions, several local banks as well as private equity firms in partnership with foreign banks are involved in the bidding process.

“The advisers have finished analysing bids already received for four of the banks. We expect the bids for the others to have been completed by the end of this month," Sanusi said.

AMCON, which will purchase non-performing loans, with collateral and chase the recovery of the bad loans, will also inject funds and take equity stakes if there are unsecured loans which need absorbing.
"I don't see any reasons why AMCON can't take these decisions in the next few weeks," he said, but added that the recovery of bad assets would take much longer.

Meanwhile, the sole administrator of the NSE, Mr. Emmanuel Ikazoboh, while commenting on the pendulum nature of the market which  appreciates in prices and the next day reverses, noted that it is a phase that will soon pass away.

“Other global markets are witnessing decline too. The market is a reflection of what happens in an economy. It shows we are operating a dynamic market which cannot remain static,” he said.

According to him, a lesson that investors through the Exchange need to learn from the global meltdown is the essence of portfolio diversification, stating that many investors had hitherto concentrated on equity at the gross neglect of other asset classes, especially fixed income securities.

While enjoining companies to take advantage of the reduction in the price mechanism for raising bond in the market, he noted that investors should also take advantage of the fee reductions to include fixed income securities in their portfolios.

The spread of one’s income on the different portfolios in the investment circle will allow investors to have a basketful of mixture of stocks that will not be adversely affected by government’s  wrong economic policies .

Meanwhile, the tension generated by the removal of Prof. Okereke-Onyiuke, erstwhile director general of the stock market and suspension of Alhaji Aliko Dangote as president of the exchange is yet to abate. Stakeholders maintained that justice must not only be seen to have been done in the matter, but as clear as possible to erase any ill feeling among local and foreign investors who will be at the receiving end when all the chips are down.

Activities in the stock market re-opened for the week on a positive note, with marginal recovery witnessed on the impact of highly capitalised quoted companies even as price losses outweighed gains.

The impact saw total value of the market, measured by the market capitalisation inched up by N42 billion. Consequently, corporate performance indices or the All-share index of the exchange rose by 171.66 points or N42 billion from N6, 110 trillion recorded on friday last week to N6, 152 trillion and 25,984.80 to 25,156.46, representing 0.68 per cent.

Turnover, however dropped significantly as 263 million shares worth N2.3 billion changed hands in 5,819 deals lower than 445million units values at N3.2 billion traded in 6,092 deals on Friday.

In the day’s transaction, 35 stocks suffered price depreciation compared to 31 that constituted the gainers chart.

Specifically, one of the petroleum marketing giants, Total Nigeria Plc, emerged the day’s highest price loser with N5.01, while Flourmills Nigeria Plc followed with N1.51.

On the other hand, Northern Nigeria Flourmills Plc topped the gainers chart with 185kobo, followed by Nigerian Breweries Plc with 145 kobo.

With transactions exchanged in 3,294 deals, the banking sub sector remains the most active stock in volume terms with 178.7million shares valued at N1.5 billion while the insurance sub sector followed with 24 million units worth N29.2 million in 197 deals. The information & communication technology sub-sector ranked third with 11.8 million units worth N6.4 million.

Trading in the shares of First Bank Plc enhanced activities in the banking sub sector with 37.4  million shares valued at N486.9 million in 783deals while Fin Bank Plc followed with 32.1 million units worth N16.2 million.

The bullish trend on the NSE continued on Tuesday, as the value of listed equities, despite significant decline in the four sectoral indices, appreciated by N17.28 billion.

Specifically, equities’ value, represented by the market capitalisation, went up by 0.28 per cent to close the day’s trading at N6.169 trillion from N6.152 trillion it opened with.

The All-share index, another market indicator increased by 71.76 basis points to close at 25,228.22 points from 25,156.46 points.

The improvement in the market indices was occasioned by gains on the share prices of major highly capitalised stocks, represented by the NSE 30 index, which rose by 0.36 per cent to 1,052.69 points.

This was in spite of a slide in the four sectoral indices — the NSE Food/Beverage Banking, Insurance and Oil/Gas Indices. The NSE Food/Beverage index dipped by 0.05 per cent to close at 812.54 points, NSE banking index shed 0.59 per cent to close at 377.66 points, NSE Insurance index slided by 0.51 per cent to 276.26 points while the NSE Oil/Gas index also dropped by 0.32 per cent to close at 371.85 points.

Nigerian Breweries Plc recorded the most share price gain on the gainers table with a gain of N3.14.

Northern Nigerian Flour Mills Plc followed with a gain of N1.94 and Guinness Nigeria Plc garnered N1.00.

Equity trading depreciated by 26.78 per cent, as a turnover of 192.63 million shares valued at N2.04 billion was recorded in 6,285 deals, in contrast to the previous day’s turnover of 263.08 million shares valued at N2.31 billion in 5,819 deals.

Analysis of trading in the shares of some companies in the banking and automobile & tyre sub-sector on Wednesday lifted the volume of shares traded as 292.5 million shares valued at N2.9 billion changed hands in 6,303 deals higher than 192.6 million units worth N2 billion recorded in 6,285 deals on Tuesday.

Specifically, at the close of transactions in the day, the banking sub-sector remains the most active stock in volume terms with 138.3 million shares valued at N1.1 billion in 3,126 deals. The automobile and tyre sub-sector followed with 53.8 billion units worth N190.6 million in 28 deals, while conglomerates recorded 18.4 million units valued at N95.8 million in 235 deals.

A breakdown of activities in the banking sub-sector showed that the sub-sector was strengthened by activities in the shares Access bank Plc and Zenith bank Plc with 24.6million shares and 21.2million units worth N196.7million and N286.million units in 209 and 345deals.

RT Briscoe Plc’s 53.8 million shares valued at N190.6 million enhanced activities in the automobile & tyre, while the conglomerates sub-sector was energised by activities in the shares of TransNational Corporations and PZ Cussons which traded 15.7 and 1.3million units valued at N7.8 and N45.2million.

Activities in the day showed that 34 stocks enjoyed price appreciation compared to 30 that constituted the losers chart even as the All-share index fell by 58.2points or 0.23 percent from 25,228.22 recorded on Tuesday to 25,170.02 while market capitalisation depreciated by N14billion or 0.22percent from N6,169trillion to N6,155trillion.

On Thursday investors’ on the trading floor of the Exchange continued their patronage of banks shares as a total of 146.6 million shares valued at N1.3 billion exchanged hands in 3,410 deals.

The high volume of share traded in the sub-sector was largely driven by the activity in the shares of Zenith Bank Plc, Guaranty Trust Bank Plc, Access Bank Plc and Fidelity Bank Plc.

Trading on the shares of the four banks accounted for 83.9 million ordinary shares or 57.2 per cent of the sub-sector turnover.

The Insurance sub-sector driven with the activities in the shares of AIICO Insurance Plc and Universal Insurance Plc followed the banking sub-sector with a turnover of 15.7 million valued at N18.4 million in 371 transactions.

The market capitalization rose in the day by N7 billion or 0.1 per cent to close at 6.162 trillion while the All-share index appreciated by 27.9 basis points or 0.1 per cent to close at 25,197.92 as against 25,170.02 as its opening index.

A review of transaction for the day showed that 33 stocks appreciated in value with Total Nigeria leading on the gainers’ table with N5.00 while 27 stocks depreciated in value with African Petroleum leading the pack of losers’ with a loss of N1.17.

The market however closed the week on Friday on a downward  note as the market capitalisation dip by N22 billion while the index climbed by 91.06 points to close the day at a low of N6.140 trillion and 25,106.86 points respectively.

The value of the total market volume in the week stood at N11.61 billion with a turnover of 1.2 billion in 36,855 deals compared to a total of 1.23 billion shares valued at N11.3 billion exchanged previous week in 33,0650 deals.

The composite review of transaction last week showed that Northern Nigeria Flourmills for the second week running led the gainers chart with N5.83. Nigerian Breweries, The Okomu Oil Palm, PZ Cussons and Benue Cement Company followed closely with N4.59, N2.22, N2.00 and N1.00, while
African Petroleum Plc, Floumills Nigeria, Lafarge Wapco Cement, University Press and Nig. Aviation Handling Company led the pack of the five top most stocks which depreciated. They fell by N5.79, N3.01, N1.44, 80 kobo and 59 kobo respectively.